Trian Partners Nominates Nelson Peltz for Procter & Gamble Board

Trian Fund Management (“Trian”) beneficially owns approximately $3.3Bn of shares of The Procter & Gamble Company (“P&G”) – filed a preliminary proxy statement with the SEC for the election of Nelson Peltz, CEO of Trian, to P&G’s Board of Directors at the 2017 Annual Meeting of Shareholders

As one of P&G’s largest shareholders and given P&G’s disappointing results over the past decade, Trian has a keen interest in helping P&G address the challenges it is facing

Weak total shareholder returns:

Over the past decade, P&G has underperformed relative to both its peers and the S&P 500

P&G’s total return to shareholders was less than half that of its peers and has been in the bottom quartile over most recent time frames

Deteriorating market share:

Over the past 5 years, organic sales growth has decelerated and has lost market share across most of its categories

Organic sales and volume growth have been well below that of traditional large-cap consumer packaged goods peers

Disruptive and existential threats are impacting the entire consumer packaged goods industry, including changes in tech and consumer behavior, and P&G must act with urgency to address the market share it is losing to both its peers and smaller local competitors who are adapting to industry changes more effectively

Excessive cost and bureaucracy:

Management acknowledges the need to reduce cost and bureaucracy but it is clear to Trian that these critical issues have not been sufficiently addressed

Trian’s analysis shows that P&G’s $10 Bn cost-cutting program launched in 2012, has had no discernible impact on profits and sales growth

To the extent savings were reinvested to drive growth, there was little impact on organic volume growth and market shares declined

Savings did not drive earnings growth given that operating profit was essentially flat from 2012 to 2016

Although P&G stated that it has identified $13Bn of additional cost savings, Trian is concerned that this initiative will be as ineffective as the 2012 program in driving sales growth, earnings growth and shareholder value creation

P&G has an overly complex organizational structure and a slow moving and insular culture

Adding Nelson Peltz to the Board will help P&G address these challenges

At consumer companies where Mr. Peltz has served on the Board, EPS growth has outpaced the S&P 500 by an average of 780bps annually

Total shareholder returns at consumer companies where Mr. Peltz has served on the Board have outperformed S&P 500 by an average of 880bps annually

What Trian is NOT pushing for:

NOT advocating for the break-up of the Company

NOT suggesting that the CEO be replaced

NOT seeking to replace directors

NOT advocating taking on excessive leverage

NOT seeking to cut pension benefits

NOT suggesting that R&D, marketing expense or capex be reduced

“Trian believes the job of a highly engaged shareowner in the boardroom is to foster a true sense of ownership among directors and inspire the board to take decisive and timely action to create sustainable, long-term value for both the company and its shareholders” – Nelson Peltz

“As a member of the Board, it would be my goal to help improve performance by increasing sales and profits and regaining lost market share. I also believe the Board must address the company’s structure and culture. I can add far more value operating within the P&G boardroom than by merely looking in from the outside” – Nelson Peltz

Nelson Peltz’s Background and Experience

CEO and Founding Partner of Trian, a highly regarded investment management firm formed in 2005

Over the course of his career, served on a number of corporate boards and is currently a director at Mondelez (since January 2014), Sysco (since August 2015), The Madison Square Garden (since December 2014) and the Wendy’s Company where he is non-executive Chairman (since 2007)

If elected to the P&G Board, he intends to resign from at least one of his current boards

Previously, served as a director of Ingersoll-Rand, Heinz Company, Legg Mason, and National Propane Corporation

Native of Brooklyn – began his career in 1963 when he joined his family food business

From 1993 to 2007, served as the Chairman and CEO of Triarc Companies – during that period, Triarc owned Arby’s and acquired Snapple Beverage Group as well as other consumer and industrial businesses

Was Chairman and CEO of Triangle Industries and parent of American National Can Company until it was acquired by Pechiney